DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.367 of 2016

                                                Date of institution:  13.06.2016                                             Date of decision   :  08.08.2018

Harpreet Singh son of Kehar Singh, aged 31 years resident of House No.3155-B, Sector 48-D, Chandigarh.

…….Complainant

Versus

1.     The Managing Director, Bajwa Developers Limited, SCO No.17-18, Sunny Enclave, Desu Majra, District SAS Nagar, Mohali

2.     The Manager (Sales), Bajwa Developers Limited, SCO No.17-18, Sunny Enclave, Desu Majra, District SAS Nagar, Mohali.

                                                            ……..Opposite Parties

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member.

                Mrs. Natasha Chopra, Member.

Present:     Shri Pankaj Maini, counsel for complainant.

                Shri Amit Sharma, counsel for OPs.

Order by :-  Shri G.K. Dhir, President.

Order

               One BHK Flat BR No.(1266) 1266 having value of Rs.12,52,000/- with area of 450 sq. ft. (approx), was booked by complainant and thereafter an agreement dated 20.04.2011 was arrived at between the parties. Complainant paid Rs.5,00,000/- on different dates. Details of payments given in the complaint are mentioned in the following table:

                Total paid amounts comes to Rs.5,00,000. However, despite receipt of these payments, project work not started till date. Flat was to be allotted in Sector 74-A – 117 of Mohali area. Different dates of possession were given to different customers, despite the fact that OPs have not obtained permission from GMADA authorities for setting up this residential colony. Permission was got by OPs from GMADA on 19.05.2014 subject to getting of approvals from other statutory bodies. It is claimed that customers have been deprived of their hard earned money by way of cheating after accepting hefty amounts, despite the fact that requisite sanctions have not been obtained. OPs have adopted unfair trade practice by giving false assurances to customers and as such punitive damages of Rs.5 lakhs for defrauding the customers even sought. OPs have sold the flat to complainant which is earmarked for EWS category by taking money from him under the general category. That also amounts to defrauding customers by adopting unfair and restricted trade practice. Flat was booked by complainant for catering to needs of expanding family. It is claimed that act and conduct of the OPs has caused lot of mental tension, agony and harassment to the complainant and as such this complaint filed for seeking refund of the paid amount of Rs.5,00,000/- with interest @ 18% per annum, which comes to Rs.4,50,000/- (approx.). Compensation for mental agony and harassment of Rs.2,50,000/- more claimed.

2.             In reply submitted by OPs, it is pleaded inter alia as if the complaint is time barred in view of Section 27 read with Article 54 of Indian Limitation Act and Section 24-A of Consumer Protection Act, 1986 because agreement entered into on 18.06.2011, but the last payment of Rs.1,87,500/- made on 16.04.2012, whereas the present complaint filed on 13.06.2016 i.e. after more than 5 years of date of agreement. Besides construction and possession of the flat was subject to payment plan annexed with the agreement. Complainant paid earnest amount of Rs.3,13,000/- in two installments, despite the fact that final payment  was to be made by 18.12.2012. Both the parties are bound by terms of the contract/agreement. As per Clause-3 of the agreement in case any installment not paid within period of 15 days from the stipulated date, then earnest amount to stand forfeited. In Clause-7 of the agreement, it was stipulated that the flat is meant for Economically Weaker Sections of the society and purchaser to abide by the norms fixed for allotment of flat to Economically Weaker Sections of the society.  Even admission in that respect virtually has been suffered by complainant in Para No.4 of the complaint. Consent of OPs to agreement was obtained by fraud because of concealment of facts regarding entitlement of complainant to flat to be allotted to Economically Weaker Sections of the society. Complainant deliberately disclosed himself to be eligible for allotment of flat and as such agreement alleged to be void abinitio.  As per terms of agreement, complainant was required to pay the entire sale consideration amount of Rs.12,52,000/- in six installments of Rs.1,87,500/- each, but complainant paid Rs.5.00 lakhs in all on different dates. Four of installments never paid by complainant and as such it is claimed that earnest amount of Rs.3,13,000/- stand forfeited as per Clause-3 of agreement. As complainant belongs to affluent category, but despite that he booked the flat meant for Economically Weaker Sections of the society by fraud and as such now it does not lie in the mouth of complainant to claim that OPs sold Economically Weaker Sections category flat to him, more so when Clause-7 of agreement specifically provides that purchaser to fulfill conditions requisite for allotment of Economically Weaker Sections category flat.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 and Ex.C-2 and thereafter his counsel closed evidence.  On the other hand counsel for OPs tendered in evidence affidavit Ex.OP-1/1 of Shri Jarnail Singh Bajwa, Managing Director and affidavit Ex.OP-A of Shri Baldev Singh Bajwa, Director of OPs and thereafter closed evidence.

4.             Written arguments submitted by complainant. Oral arguments heard and records gone through.

5.             From the pleadings of the parties and contents of the submitted affidavits, it is made out that complainant paid Rs.5.00 lakhs in all to OPs for purchase of 1 BHK BR 1266 for total sale consideration of Rs.12,52,000/- and the same fact even established by copy of agreement Ex.C-1 relied upon by both the parties. Receipt of payments of amounts of Rs.2,00,000/-; of Rs.1,12,500/- and of Rs.1,87,500/- on dates 20.04.2011; 13.05.2011 and 15.04.2012 are endorsed on the agreement itself under signatures of Mr. J.S. Bajwa. So it is obvious that though full amount of Rs.12,52,000/- was payable in 6 installments, but amount of Rs.5.00 lakhs alone was paid by complainant to OPs. Schedule of payment of 6 installments mentioned in Para No.2 of the agreement. As per this Para No.2 of agreement, amount was payable in 6 installments spread from 18.06.2011 to 18.12.2012. However, complainant virtually paid only two installments i.e. earnest amount of Rs.3,13,000/- and the first installment amount of Rs.1,87,800/- only at the most, which is not as per stipulations contained in Para No.2 of agreement. So certainly complainant himself committed default in making payment of 4 installments of Rs.1,87,800/- each, which were payable on 18.02.2012; 18.06.2012; 18.10.2012 and 18.12.2012.

6.             As per law laid down in Randhir Singh and Anr. Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. 2015(1) CPJ 514 (NC), if the purchaser remained defaulter in not adhering to the installment payment plan, then he is not entitled for any interest, even though the builder had not developed the site, due to which he is not in a position to deliver possession. It is so because he who seeks equity must do equity. In case the equity seeker himself is deficient, then he is not entitled for any interest, is the crux of ratio of above said case. Ratio of this case is fully applicable to the facts of the present case particularly when complainant shown to have deposited two installments alone, but has not deposited the remaining installments as per schedule of payments worked out in Ex.C-1. So, complainant will be entitled to interest with effect from the date of filing of complaint, when he sought refund of the deposited amount for the first time.

7.             It is vehemently contended by counsel for complainant that though agreement in question arrived at between the parties on 18.06.2011, but requisite sanctions from GMADA and other authorities were not obtained by OPs till 19.05.2014 and as such OPs committed fraud with complainant and other customers by pretending as if the colony in question is approved one. However, that submission has no force because after going through Clause-6 of relied upon agreement by parties, it is made out that in case flat/plot, going to be sold to complainant, for any technical reason, does not get approval of the authorities, then the allottee will be entitled for return of earnest amount, but without seeking compensation. When this specific clause 6 of the agreement exist, and complainant made payments after acknowledging this agreement, then there is no escape from the conclusion that complainant was specifically made aware of the fact that requisite sanctions from authorities yet to be obtained and that is why it has been specifically mentioned in Clause-6 that in case for any technical reason, requisite sanctions from the authorities not received, then refund of the earnest amount without compensation can be claimed by complainant. As terms of agreement itself provides that complainant was made aware about non getting of approvals by OPs and as such if the LOI Ex.C-2 from GMADA obtained by OPs on 19.05.2014, then the same does not make any difference. So pleas taken in the written reply as well as in the submitted affidavits Ex.OP-1/1 and Ex.OP-A are correct that complainant was made aware at the time of booking of flat that still sanctions/approvals to be obtained from competent authorities. In view of this, it is obvious that complainant booked the flat in question with OPs knowing fully well that the requisite sanctions yet to be obtained. If that be the position, then certainly submission of counsel for complainant has no force that OPs committed fraud with complainant by receiving amounts in question, despite the fact that requisite sanctions were not obtained by OPs at the time, when the amounts were received by them. Rather complainant was fully made aware of the fact that for the upcoming project in question, requisite sanctions yet to be obtained, but despite that complainant opted for booking of flat and as such reasonable inference that can be drawn is that complainant himself indulged in speculations, while depositing the amounts in question with OPs, but in hope that OPs will get the requisite sanctions as projected by them. So allegations of fraud or of cheating not at all made out from the material produced on record.

8.             Counsel for complainant vehemently placed reliance on composite decision dated 08.02.2018 of Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh delivered in CC No.716, 789, 835 etc. of 2017 titled as Mangal Singh Kondal & others Vs. Bajwa Developer & Another for arguing that refund of the deposited amounts should be with interest @ 12% per annum from the dates of deposit till realisation. That submission of counsel for complainant has no force for purposes of this case, more so when complainant has deposited an amount of Rs.5.00 lakhs  out of total sale consideration of Rs.12,52,000/-. Complainant has deposited as such about 40% of the sale consideration amount and as such it is a case in which complainant not sticked to the payment schedule laid down in agreement relied upon by the parties.  In view of this non sticking to the payment schedule plan virtually by complainant, he is entitled for refund of the paid amount with interest @ 12% per annum from the date of first demand put forth by way of filing of this complaint only. Hon’ble State Commission in the above cited case relied upon Rule 17 of Punjab Apartment and Property Regulation Act, 1995 for allowing interest @ 12% per annum with effect from the dates of deposits, but in the present case before us, rule applicable is contained in Section 12 of above said Act. Rule 17 has application in cases governed by Section 6 (1) of Punjab Apartment and Property Regulation Act, 1995. That Section 6 (1) of Punjab Apartment and Property Regulation Act, 1995 provides that a promoter intending to construct a building apartment before acceptance of any money as advance payment or deposit, will not accept more than 25% of the sale price and thereafter will enter into written agreement for sale with each of the persons, who are to take possession of apartments/plots. However, Section 12 of Punjab Apartment and Property Regulation Act, 1995 provides that if the promoter fails to give possession in accordance with terms of agreement for reasons beyond his control and of his agents by specified date or further agreed date, then the promoter shall be liable on demand, but without prejudice to any other remedy to which he may be liable, to refund the amounts already received by him in respect of that plot or apartment with simple interest at the rate as may be determined by competent authority from the date the promoter received the sums till the date the amounts and interest thereon is refunded. Present is a case in which OPs failed to get requisite sanctions/approvals from the authorities as per case of complainant himself. If that be the position, then case in hand is governed by Section 12 of Punjab Apartment and Property Regulation Act, 1995 and not by Section 6 (1) of Punjab Apartment and Property Regulation Act, 1995. Rule 17 of Punjab Apartment and Property Regulation Act, 1995 is applicable, when the case governed by Section 6 of Punjab Apartment and Property Regulation Act, 1995. In view of this, by invoking Section 12 of Punjab Apartment and Property Regulation Act, 1995, this Forum has discretion to allow interest at such rate as is reasonable and appropriate in the facts and circumstances of this case. Present is not a case of cheating/fraud as projected by counsel for complainant in view of Clause-6 of agreement, discussed in detail above. Moreover, complainant himself failed to comply with requirements of allotment of Economically Weaker Section category flat, despite specific stipulation contained in Clause-7 of agreement Ex.C-1 and as such complainant not entitled to any interest, till the date he sought refund of the same for the first time. That refund for the first time sought by filing this complaint and not by issue of any notice and as such allowing of interest @ 12% per annum from the date of filing of complaint will be reasonable, proper, equitable and just.

9.             It is also contended by counsel for complainant that OPs accepted amounts in question from complainant for allotment of EWS category flat by assuring as if the flat is in general category. That submission of counsel for complainant again has not much force because after going through Clause-7 of agreement in question, it is made out that duty was cast upon complainant, being purchaser, to comply with the terms and conditions for allotment of flat in EWS category. If OPs have not issued notice to the complainant for calling upon him to comply with requirements for allotment of EWS category flat, then at the same time complainant also remained at fault in not ascertaining as to whether the allotted flat is in general category or is in the category of EWS. So fault also lay with complainant in view of non compliance with the obligation put on him under Clause-7 of the agreement.

10.            OPs claim through written reply as well as affidavits Ex.OP-1/1 of Jarnail Singh Bajwa, MD and Ex.OP-A of Baldev Singh Bajwa, Director that agreement in question be treated as void and as such virtually the agreement in question sought to be rescinded by OPs. In view of that virtually OPs are seeking declaration of agreement as voidable. Besides after taking us through Clause-7 of agreement Ex.C-1, it is sought to be contended that as purchaser (complainant) failed to fulfill the terms and conditions of agreement or bye laws providing for allotment of EWS category flat and as such agreement in question is void. Certainly after going through Ex.C-1 it is made out that flat in question allotted to complainant was subject to fulfillment of terms and conditions requisite for allotment of flat to EWS category. Even if complainant failed to submit the requisite declaration for showing his entitlement to the EWS category flat in question, despite that the agreement at the most can be declared as voidable at the option of OPs, if they want to treat it as void.

11.            It is vehemently contended by counsel for OPs that in fact flat sought by complainant is of EWS category and as such for getting benefit of EWS Housing Scheme, certificate of annual income of complainant being less than Rs.3.00 lakhs, from all sources required as per Clause-1 (viii) of scheme evolved by Department of Housing & Urban Development, Govt. of Punjab. Even if complainant may not have fulfilled the requirement to avail benefit of EWS housing scheme, despite that OPs themselves remained at fault in not getting the formalities complied with in that respect by issue of notice or otherwise and as such in case OPs to get the agreement declared void, on account of non fulfillment of conditions by complainant requisite for getting benefit of EWS housing scheme, even then they cannot retain the received amount because in doing so they virtually are seeking unjust enrichment. OPs themselves are also at fault in not starting the construction.

12.            Section 65 of Indian Contract Act, 1872 specifically provides that when an agreement is discovered to be void, or the contract becomes void, then any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person, from whom he received it. Likewise, Section 64 of Indian Contract Act provides that when a person at whose option a contract is voidable rescinds it, the other party there to need not perform any promise therein contained, in which he is the promisor Further as per second part of this Section 64, the party rescinding a voidable contract shall, if he had received any benefit thereunder from other party to such contract, will restore such benefit, so far as may be, to the person from whom it was received.  In view of these provisions contained in Sections 64 and 65 of Indian Contract Act, it is obvious that if the contract is sought to be declared as void due to non compliance of the formalities requisite by rules and regulations for entitlement of complainant to EWS category flat, then the OPs cannot retain the benefit received by them under contract Ex.C-1. However, OPs are bound to return the received amount of Rs.5,00,000/- with compensation of interest with effect from the date of filing complaint because OPs themselves made complainant to believe as if agreement Ex.C-1 is valid and that is why he put signatures on it in token of correctness by acknowledging its terms. However, in case the OPs want to get this agreement declared as voidable at their option, even then they are bound to return back received amount of Rs.5,00,000/-.

13.           Complainant certainly is consumer of OPs within meaning of Section 2 (1) (d) of CPA because he availed services of OPs for purchase of flat on payment of part of sale consideration with promise of paying balance amount on execution of sale deed or on getting of possession of flat in question. It is the case of complainant that OPs have not developed the project and as such fault lays with OPs in not fulfilling promise of delivering the possession to complainant. For that fault of OPs, complainant cannot be made to suffer and as such on equitable considerations also, complainant entitled for refund of paid amount of Rs.5,00,000/- with interest.

14.            Even if condition No.3 in agreement may be providing for forfeiture of the earnest amount in case payment of installments not made as per schedule, despite that enforcement of this clause by OPs is not legally tenable, because of provisions of Section 64 and 65 of Indian Contract Act referred above and also because of the fact that OPs have not completed the project or even started the same, despite receipt of amount from complainant, as referred above.

15.            Even as per law laid down in Vasant Mahadero Kate Vs. Shastri Gruha Nirman Sahkari Sanstha Ltd. II (2015) CPJ 4 (NC),  purchaser of plot has continuous cause of action available to him unless and until possession of plot handed over to him. So in view of availability of recurring cause of action in favour of complainant till refusal, certainly complaint is not barred by limitation and submission of counsel for OPs to the contrary has no force.

16.            As per case of Kushal K. Rana Vs. M/s. DLF Commercial Complex Ltd., 2015(1) CLT 134 (NC), terms and conditions of buyers agreement for purchase of flat/plot is not a one way traffic, but both the parties are bound by it. In the event of deficiency in service on part of builder, the builder bound to refund the received amounts with interest.

17.            As a sequel of above discussion, complaint allowed by directing OPs to refund the received amount of Rs.5,00,000/- (Rs. Five Lakhs only) with interest @ 12% per annum from the date filing of complaint namely 13.06.2016 till payment. Compensation for mental agony and harassment of Rs.20,000/-  (Rs. Twenty thousand only) and litigation expenses of Rs.5,000/- (Rs. Five thousand only) more allowed in favour of complainant and against  OPs.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order failing which complainant will be entitled to interest on the amounts of compensation and litigation expenses @ 7% per annum after expiry of said period of 30 days of receipt of certified copy of the order till payment. Certified copies of the order be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

August 08, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                       (Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member